Japan Unemployment (% of active population, eop)

GDP rebounded by less than expected in Q4. This was largely due to a surprise plunge in inventories. More positively, private and public spending accelerated because of a travel subsidy scheme and the government’s USD 200 billion spending package. Heading into Q1, GDP growth should remain weak. Inflation rose to a fresh multi-decade high in January, likely crimping private spending. In addition, exports are likely to stall despite China’s reopening and better-than-expected data in Europe and the U.S. In January, the trade deficit widened to a record level. In other news, on 14 February, Ueda Kazuo was selected as the new Bank of Japan governor. His term will begin on 8 April and will likely coincide with limited changes to monetary policy.